State audit questions Crystal Springs spending

Crystal Springs, a Freetown-based nonprofit, state-funded human service provider, engaged in more than a half-million dollars of questionable and unallowable spending over a two-year period, according to a state audit released Tuesday.

Crystal Springs, a Freetown-based nonprofit, state-funded human service provider, engaged in more than a half-million dollars of questionable and unallowable spending over a two-year period, according to a state audit released Tuesday.

Formerly known as the Institute for Developmental Disabilities, Crystal Springs provides special education, therapeutic and residential services to approximately 110 disabled children and adults.

The bulk of the questionable costs — $359,573 of the $538,050 cited in the audit — were for transactions with Thermo Mechanical Systems Corp., a heating, ventilation and air conditioning provider, without competitive bidding. Thermo Mechanical's chief executive officer and a member of its board of directors were also members of Crystal Springs' board.

While the relationship was disclosed, failure to use a competitive bidding process is contrary to state regulations and leaves unknown whether Crystal Springs obtained the best service at the best price.

Crystal Springs told the state auditor's office that it would implement a new policy to competitively bid any purchase in excess of $2,500, a press release from the auditor stated.

The audit also recommended that Crystal Springs repay the state for $71,066. Among the questionable spending cited in the audit:

$90,922 intended for services that was used instead to purchase two vans, air conditioning equipment and flooring supplies.

$23,839 in unallowable fringe benefits to certain employees, including $11,739 in personal use of agency vehicles and $12,100 in loans.

$13,200 in rental income that Crystal Springs failed to use to offset state funding.

$38,792 in pay for an employee who was given "unnecessary" promotions and raises.

Within a year, a long-time employee was promoted twice to two previously nonexistent positions, with raises from $26,208 to $65,000. Included was a stint as special projects manager, a four-month period during which "it does not appear that any special projects were either initiated or completed," the audit said.

"The mission of Crystal Springs and other agencies of this type is vital to the welfare of some of our most vulnerable citizens," state Auditor Suzanne

Bump said. "The services provided have a significant impact on people throughout the state. State resources that fund these programs must be maximized and well-spent in accordance with laws and regulations. This audit highlights some areas that are in need of improvement."

The audit covered fiscal years 2010 and 2011, when Crystal Springs reported revenues of more than $23 million annually, the bulk of which came from various state government sources.